Retirement and Divorce: Lawyer Discusses Whether Spousal Support Ends When You Retire
A common question for BC family lawyers is whether spousal support ends at retirement. Payors of spousal support often assume that when they retire, their obligation to pay spousal support will terminate.
Some paying spouses make this assumption, retire, and then are surprised to discover that in fact, their obligation to pay spousal support did not stop when they stopped working. In this post, our divorce lawyer will discuss issues pertaining to retirement and spousal support in BC, including what a spouse would need to show when applying to terminate BC spousal support obligations.
Does your separation agreement or court order address the issue?
Spousal support does not automatically end when either the payor or the recipient spouse retires. To determine whether spousal support ends on retirement in your situation, the starting point is to examine the terms of your Separation Agreement or the terms of the final court order made by a BC judge in your family law matter. For example, a carefully drafted Separation Agreement will have addressed the issue of retirement, setting out your intentions about whether spousal support ends or the amount payable is reduced upon retirement. In other situations, retirement will be included as an explicit ground of review in a Separation Agreement or court order, and in fact, BC’s Family Law Act expressly provides that a party may apply for a review of a spousal support agreement or order where one of the former spouses begins receiving benefits under a pension. However, it is important to note that an application for review is not the same as an application for terminating spousal support – talk to our experienced divorce lawyer https://www.family-law.ca/contact-us if you would like more information about that distinction.
If the agreement or court order is silent on retirement, negotiate or apply to court
If there is no end date or review date in your separation agreement or court order, spousal support is considered indefinite. Where that is the case, it is open to you and your former spouse to negotiate the issue of ending spousal support on your retirement. If you and your former spouse cannot come to an agreement, it will be necessary to apply to the BC courts to decide the issue. Regardless of whether you negotiate or apply to the courts, divorce lawyers highly recommend that the issue be determined before you retire.
Applying to court to change a spousal support agreement
If you are applying to the court to change a spousal support agreement, what you will need to show depends on whether you are applying under BC’s Family Law Act or the federal Divorce Act. The court will consider factors such as whether the agreement included retirement as a grounds for review and whether the agreement was negotiated fairly. Contact our family lawyer to discuss the specific terms of your spousal support agreement and what you would need to show to succeed in changing or terminating contractual spousal support obligations.
Applying to court to terminate a spousal support order
If you are applying to terminate a spousal support order, both the BC Family Law Act and the federal Divorce Act require there to be a “material change in the means, needs, conditions or other circumstances of either party” before an order will be granted. The onus is on the party who applied to the court to establish a material change since the prior order.
Is retirement a “material change”?
Retirement will often constitute a material change in circumstances, but not necessarily. In deciding the matter, the court will consider factors such as:
- Is the payor spouse taking voluntary early retirement? Voluntary early retirement may not result in any reduction or termination of spousal support obligations.
- Is the payor spouse ceasing work because of a mandatory retirement or due to medical necessity or health issues? BC courts are more likely to grant relief in such circumstances.
- How will it affect the receiving spouse? Considerations in this regard include whether the receiving spouse is still working and continues to be dependent on spousal support – both of which may be of particular significance where the payor spouse is taking early retirement or where the payor spouse is retiring at the usual age of 65 but the recipient spouse is considerably younger.
- Is there evidence that the payor spouse is voluntarily retiring or withdrawing from the workforce to frustrate spousal support obligations? BC courts can impute income to a payor spouse up to the amount he or she would have earned in such cases.
- Will the paying spouse have other sources of income after retirement, such as business income, investment income, or pension income? The critical issue is whether the payor spouse’s ability to pay will be compromised by retirement.
Pensions and spousal support in BC
While it is beyond the scope of this article, there are complex issues relating to pensions that arise at the time of separation or divorce and again at the time of retirement. For example, spousal support may no longer be appropriate upon the payor spouse’s retirement if the paying spouse’s pension was divided as family property when the parties separated. This is a complicated area of BC family law and you should get legal advice from a divorce lawyer as soon as possible if pension issues arise.
Get legal advice from an experienced divorce lawyer
Do not assume that spousal support will end when you retire. Get advice from a BC divorce lawyer regarding your rights and obligations for terminating spousal support upon retirement or continuing support upon retirement if you are the recipient. Valerie M. Little is a divorce lawyer who has been practicing family law for over 30 years. Ms. Little's practice is exclusively devoted to issues of family law in Burnaby, Coquitlam, and New Westminster. No matter what family law questions or issues you might be facing, you will receive options to resolve your family law issue together with thoughtful and practical advice at the office of Valerie M. Little. For more information about any family law issue or the services we provide, or to schedule your own in office consultation with our divorce lawyer, please call us today at 604-526-3333 or respond to us by completing and forwarding the attached online form. We look forward to meeting you so we may assist you in resolving your family law issues.